Commentary on Economics, Information and Human Action

Trademark protection gone wrong, U.S. Olympic Committee edition

The U.S. Olympic Committee is starting to beat the drum for the London 2012 Olympics, 36 days to go! But their long-standing aggressive enforcement of their “Olympic” trademark has alienated an unlikely group of potential Olympics fans and TV viewers: knitters.

Yes, knitters (of which I am one). At the knitting social network Ravelry, we celebrate the achievement, hard work, dedication, skill, and passion of athletes by competing ourselves in “Ravelympics”, a good-natured competition to complete difficult projects in a limited time (during the Olympics), complete as many projects as possible, challenge ourselves to learn a new skill, etc.

The U.S. Olympic Committee objects that the name “Ravelympics” violates their trademark, which covers the name “Olympics” and the five-ring logo. If I recall correctly, Ravelry removed graphics with the five rings after the summer olympics (sorry, that should say Summer OlympicsTM) four years ago. So the remaining question is the name “Ravelympics”.

According to the cease and desist order delivered to Ravelry earlier this week, repeated in this Gawker article on the conflict (you have to register as a member to join Ravelry forums), the U.S. Olympic Committee thinks that “Ravelympics” violates their trademark on the use of the name “Olympic”, which the U.S. Supreme Court affirmed a few years ago in what I consider an overly-broad application of trademark. That’s the legal question.

But the USOC attorney’s letter is likely to wreak more reputation and economic damage than they anticipated, because in the body of the letter the attorney states

The athletes of Team USA have usually spent the better part of their entire lives training for the opportunity to compete at the Olympic Games and represent their country in a sport that means everything to them. For many, the Olympics represent the pinnacle of their sporting career. Over more than a century, the Olympic Games have brought athletes around the world together to compete in an event that has come to mean much more than just a competition between the world’s best athletes. The Olympic Games represent ideals that go beyond sport to encompass culture and education, tolerance and respect, world peace and harmony.

The USOC is responsible for preserving the Olympic Movement and its ideals within the United States. Part of that responsibility is to ensure that Olympic trademarks, imagery and terminology are protected and given the appropriate respect. We believe using the name “Ravelympics” for a competition that involves an afghan marathon, scarf hockey and sweater triathlon, among others, tends to denigrate the true nature of the Olympic Games. In a sense, it is disrespectful to our country’s finest athletes and fails to recognize or appreciate their hard work.

“… denigrate the true nature of the Olympic Games.” Hold that phrase in your mind while we talk about the economics. On its face, even a non-knitter can see how insulting these two paragraphs are, how little understanding they show of the skill, hard work, dedication, time, and passion involved in knitting something like this:

Although the USOC is cloaking itself simultaneously in its legal rights as trademark holder and its “lofty ideals”, it is doing so as a business decision, because its brand is one of the ways it attracts sponsors (such as Visa) and outfitters (such as Nike and Ralph Lauren). So let’s look at the economics here.

If knitting were simply a quaint pastime pursued by a handful of elderly women, as is the stereotype, then the USOC will not incur much cost from angering such a small market. But 1 in 3 Americans knits, and Ravelry has 2 million (yes, 2 million) members from around the world, with a substantial share of their membership in the US. That’s a lot of people to piss off 36 days before your flagship event. And lots of those knitters have spouses, partners, friends, family, with whom they will share this event through word of mouth. All of these people are potential consumers of TV coverage and of sponsor products. The tone and attitude the USOC is taking may at the margin make these people less likely to watch the OlympicsTM, or less likely to watch coverage other than specific events. In any case, the tone and attitude of this letter has diminished the reputation and tarnished the USOC brand in a larger market than they realized.

Second, social media changes this calculation and the possible impact and awareness of this story. This story really became public yesterday, and now there are hundreds and hundreds of tweets to USOC objecting to their actions. Here are a few:

(That last one is mine, naturally.) The activity is the same over at the USOC’s Facebook page, where hundreds and hundreds of knitters are criticizing the USOC in their “recommendation” section (oh the irony of the forms of social media …).

Technology and social media exacerbate this kind of misstep and miscalculation and increase its potential cost, because if stories like this go viral they go beyond the initially affected population. And here’s another irony in the economics: USOC is aggressive in enforcing its trademark because it has to make money to support athletes, and having a strong brand is a way to attract corporate sponsors in the absence of taxpayer funding of athletic training. But if their trademark enforcement angers a large enough group of well-meaning consumers who are riffing off of the OlympicsTM name to honor the athletes and the inspiration they provide, what happens when those consumers use social media to communicate to the sponsors how angry they are and how much less likely they are to purchase their products? That’s what’s happening on Twitter right now at the #Ravelympics hashtag.

I possess very little legal expertise, but it might be possible to challenge these clowns in a more fundamental way. The rings might be copyrighted, but the original olympics ran between 776 B.C. and 394 A.D. The modern games are a copy of the old ones. How can “the Olympics” then be protected?